OTC desk
OTC desk refers to a trading desk that executes large currency or digital asset trades bilaterally, away from public exchanges. The price is agreed before execution.
How it works
OTC stands for over the counter. Foreign exchange is itself mostly an OTC market. The BIS reported OTC FX turnover of $9.6 trillion a day in April 2025, with spot at 31%. Dealers report these trades bilaterally rather than through an exchange.
Crypto OTC desks apply the same model to stablecoins and other tokens. Agency desks match buyers and sellers for a commission. Principal desks quote from their own inventory and take market risk. Because the price is fixed before execution, a large order avoids moving the market against the trader.
For payment firms, OTC desks can convert large stablecoin or FX amounts for corridor funding. There is usually no clearinghouse, so a failed delivery leaves you exposed. FATF warns that unlicensed OTC brokers feature in illicit cash-out schemes. Check licensing, settlement order and limits before trading.
Example
Illustrative example: A firm needs to sell 3,000,000 USDT for US dollars. An OTC desk quotes 0.9990, so the firm receives $2,997,000. On a thin exchange order book, the same sale might average 0.9970, giving $2,991,000. The OTC quote saves $6,000.
Frequently asked questions
How do we reduce settlement risk with an OTC desk?
Agree the settlement sequence in writing, set counterparty limits and favour desks with strong custody arrangements. Some desks let assets stay in qualified custody while trading. Without a clearinghouse, delivery terms are your main protection.
Are OTC desks regulated?
It depends on the jurisdiction and activity. FATF treats intermediaries exchanging stablecoins for fiat as virtual asset service providers subject to customer checks. Confirm each desk's licenses before onboarding.
Related terms
Sources
- OTC foreign exchange turnover in April 2025 · Bank for International Settlements
- What is OTC Crypto Trading and How Does it Work? · BitGo
- Targeted Report on Stablecoins and Unhosted Wallets: Peer-to-Peer Transactions (March 2026) · Financial Action Task Force (copy hosted by Singapore Ministry of Law)
Know where all your money is.
Polynopsis gives cross-border payment teams one live position across every bank, payout partner, exchange and wallet, including money in flight, and warns before a corridor runs dry.